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Wednesday, March 17, 2021

MBA: Mortgage Applications Decrease in Latest Weekly Survey

by Calculated Risk on 3/17/2021 07:00:00 AM

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 12, 2021.

... The Refinance Index decreased 4 percent from the previous week and was 39 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 3 percent compared with the previous week and was 5 percent higher than the same week one year ago.

“Mortgage application activity was mixed last week, as the run-up in rates continues to reduce incentives for potential refinance borrowers. The 30-year fixed rate increased to its highest level since June 2020, and all other surveyed rates were either flat or increased,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “After reaching a recent high in the last week of January, the refinance index has since fallen 26 percent to its lowest level since September 2020. Rates have jumped 36 basis points since the end of January, and last week refinance activity fell across all loan types.”

Added Kan, “The purchase market helped offset the slump in refinances. Activity was up 5 percent from a year ago, as the recovering job market and demographic factors drive demand, despite ongoing supply and affordability constraints.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.28 percent from 3.26 percent, with points decreasing to 0.41 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Mortgage Refinance IndexClick on graph for larger image.


The first graph shows the refinance index since 1990.

With near record low rates, the index remains elevated, but, as expected, was down year-over-year - since rates fell sharply, and refinance activity picked up, at the beginning of the pandemic).

The second graph shows the MBA mortgage purchase index

Mortgage Purchase Index According to the MBA, purchase activity is up 5% year-over-year unadjusted.

Note: For the next 8 or 9 weeks, the MBA index will be up sharply year-over-year since purchase activity collapsed in late March 2020 in the early weeks of the pandemic.

Note: Red is a four-week average (blue is weekly).